Hindalco is getting closer to the financial closure of Utkal Alumina project. Sources tell NDTV that Hindalco is raising Rs 4,500 crore debt to fund the alumina project in Raigad, Orissa.
SBI and IDBI have agreed to arrange for the fund. The total capex of the project is Rs 6,000 crore.
Sunirmal Talukdar, the CFO of Hindalco said, “ We are in talks with banks for the financial closure of Utkal. The amount is not final, it will depend on the debt- equity ratio we want.”
Utkal Alumina is an ambitious project by Hindalco to produce 1.5 MTPA of alumina by July 2011. The project also encapsulates 2 MTPA production of bauxite, the feedstock for alumina. Hindalco has already spent close to Rs 1,000 crore on the project.
Hindalco has Rs 5,000 crore in cash and the debt-equity ratio is at 60:40. Hindalco has many more projects in the pipeline like Mahan Aluminium and Aditya Aluminium that may have prompted the decision to raise $500 million via QIP to give them more headroom for raising debt in future.